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What drives your company?

IN his earlier business life, Howard Hyden was a senior executive in a Fortune 100 company that he says was really 155 different small businesses. His job? Renovate the ones that were losing millions of dollars or had revenue that was “as flat as a pancake.”

He never allowed himself to be obsessed with profit-and-loss statements. He was driven by the customer, focusing not on motivational techniques but on marketing strategies. He wanted the customer to be handed a blank tablet and asked this question: “What would awesome be to you?” He wanted the customer to “design the play” — the ideal hours of operation, lead times, what the customer wanted, and when.

“The interesting thing is that the harder and more passionately I worked for the customer, the luckier I seemed to get on the bottom line,” he said.

These days, he's president of the Center For Customer Focus, which provides customer-focus-oriented training, consulting, and speaking for companies and organizations throughout the United States, specializing in helping businesses find new competitiveness and motivation by looking at their company through the eyes of their customers.

In delivering his session at The Work Truck Show, “Leadership For the Next Millennium,” he prowled Room 107 of the Indiana Convention Center like a panther, gesticulating, addressing audience members individually, asking questions in a rapid-fire delivery, and offering “golden nuggets” he hoped would serve as telling takeaways.

He said he devised two terms for an organization's perspective: inside-out (product driven) and outside-in (customer driven).

He said a VCR would be a typical example of inside-out because 90% of the adult population can't program it.

“Take a look at the remote — have you ever seen so many buttons?” he said. “It looks like the cockpit of an airplane. How many people think that if they added one more button, it would add value? Doing more for the customer is not necessarily better. Better is better. Who is it that determines better? The customer. Not the president of a company, not the sales rep, not the engineer. I only care about one thing: Does the customer think it's awesome? Then it is.”

He said Boeing would be an example of outside-in. When Boeing embarked on a design for its 777 aircraft, the company did something revolutionary — it asked its customers, and tried to get its engineers in direct contact with airline personnel.

“With the 757, 747, and 737, the engineers were like, ‘We graduated from Harvard and Stanford. We know how to build aircraft. This is sophisticated stuff. What does a flight attendant know?’ Well those are the old days. And the old days are disappearing fast.”

He said the attendants said that when a reading light burns out, they had to fill out a maintenance request form, process that up their chain of command and then through the maintenance chain. Finally, a mechanic would come in with a ladder and change the bulb. The suggestion: Put some bulbs in the galley and redesign the light so that the attendant can change it in flight.

He said there has been a huge power shift that clashes dramatically with Henry Ford's statement: “You can have the car in any color you want, as long as it's black.”

“The customer is saying, ‘Let me tell you how I want it, when I want it,” he said. “If you want to play the game at the average level, you understand what the customers’ requirements are today. If you want to play the game at the awesome level, you'd better start figuring out what could change in your customers' world and start designing your product so when that change comes, it's not going to cost them an arm and a leg.”

Effective marketing

He said that before he spoke at an Anheuser-Busch meeting in Atlanta, he did some research and learned that one of every two beers sold in America is an Anheuser-Busch product.

“I got up on stage and said, ‘If I were a beer wholesaler, I would stop selling beer,’ ” he said. “I looked at August Busch IV (then the senior VP of marketing) in the front row and noticed he turned his head to the person next to him and whispered in his ear. I'm guessing it went like, ‘Who hired this jerk?’

“I said, ‘Let me tell you what my strategy would be if I were a beer wholesaler. I would help the customer sell more beer.’ They have two different types of customers: on-premise (restaurant) and off-premise (liquor store). What do you suppose the marketing skills are of the guy running the liquor store? He has a tough time spelling ‘marketing.’ Anheuser-Busch knows how to market. So if I were a beer wholesaler, I'd build marketing programs for the liquor-store guy to help him sell more beer. Because if you can help him sell more beer, you're going to sell more beer.”

Look for potential

Hyden said most companies have the biggest potential in non-product areas such as business hours, accounting, order entry, lead time, documentation, and Web sites.

He said customers probably don't want to be sent 10 invoices a month when they pay their accounts once a month. He said most Web sites are inside-out because they're “nothing more than electronic brochures.”

“It should be loaded with PDFs, instructional books, user manuals, troubleshooting guides,” he said. “And how about a phone number on every page?”

In defining customer focus, he said many companies believe that quality is a competitive advantage. He said it isn't a competitive advantage because “everybody is doing it.” Likewise, he said customer service isn't a competitive advantage “unless your competitors are pathetic” at it.

“Customer service usually is aimed at the customer contact person,” he said. “When I walk into the Marriott, I'm not against somebody smiling at me and calling me by name. But here's the deal: If you have to hire a consultant to come in and tell you to call the customer by name, then you don't need me. You need intensive care. Every employee in the company has to look at his job through the eyes of the customer. Every employee. I don't care if they never talk to the customer. Every employee has to add value on the top of the basic product.”

He said one of his clients is Del Webb, which builds retirement communities in 10 states. The company's electrician can add value by putting electrical outlets 30" from the ground, instead of 12". Why 30"? Because everybody in Del Webb communities is at least 55 years old, and many have trouble bending down to an outlet that is 12" off the ground.

Then there's Tomar Electronics, another client of Hyden's and an exhibitor at The Work Truck Show. He said Tomar “dares to be awesome” because it has come up with a solution for ambulances that have a light bar that doesn't work. He said ambulance services used to lose thousands of dollars while they waited up to three weeks for a replacement light bar. Now Tomar can produce one in 1½ hours when a salesman calls in a crisis order.

“Five desks drop whatever they're doing and put together a team to build that bar,” Hyden said. “Then they get a digital camera and take a picture of the team with that bar. And as soon as the light goes off in the factory to signify that the job is done, everybody in the factory drops what they're doing to give a high-five to the team. The team then walks around with a bit of a strut.”

Be prepared

He said the average sales person dreads being asked why his company's product is more expensive than a competitor's. The sales person will say, “Wait a second. I'll get back to you.” The awesome sales person, however, can't wait for that question to be asked.

Showing a slide of his daughter, Tiffany, competing at the 2002 World Figure Skating Championships, Hyden added: “Think they were just winging it? You can't play the game at the world-championship level by winging it. Are your employees winging it? Or has every single one of them designed their awesome play and practiced a hundred times so when the customer walks in, they're ready to execute it?”

He said that in the process of doing a strategic plan for a company, he was told by the management team, “We're no worse than the competition.” He said, “Did I hear you right — that nobody in this industry is awesome?” When they nodded, he thought to himself, I'm the only one in this room who smells an opportunity.

He cited statistics by US News and World Report showing that while 9% of lost customers cited price and 14% cited dissatisfaction with the product, 68% cited indifference by someone at the supplier.

“Whose fault is it that employees were indifferent? Management. They hired them. They slam-dunked them into the job, didn't communicate the play and didn't give them 10 seconds worth of training. If you communicated the play and trained them and they're still screwing up, it's still your fault. You hired them.”

He said too many companies have their eyes focused on the relationship between the employees and customers when they should have had them focused on the relationship between the employees and management.

“What are the odds that I'm going to get the employee to change his behavior if I don't get senior management to change theirs? Zero,” he said.

Albert Einstein once said, “The definition of insanity is doing the same thing over and over again and expecting different results.”

“If management keeps doing the same thing over and over again and expects different results, that's the definition of insanity,” he said.

He said that according to social scientist and author Daniel Yankelovich, considered by many to be the founding father of public opinion research: 50% of American workers said they do not put any more effort into their jobs than is required to hold onto it; and 75% say they are not currently working at their full potential.

“Is this good news or bad news?” Hyden said. “Good news. Bad news would be that 100% of the employees are working at 100% of their potential. Then I'd have to add head count. With 75%, you've got the potential on the playing field. You just have to get it out of them.”